Finding the right tenants for your rental properties can ensure both your financial security and the condition of your rental. The right occupants will pay rent on time, avoid causing trouble, follow the lease, and take care of your property. However, it can be tricky to thoroughly screen your applicants.
This guide will break down exactly what you should include in your screening process. Keep these categories uniform to hold each tenant to the same standard. You can then make a positive first impression on applicants and run a more responsible business. By understanding some key criteria, you can fill your properties with the best possible tenants.
Use a rental application
While you are not legally obligated to use a rental application form, it is wise to do so. This helps you keep your records organized, and you will have something tangible to refer back to when making decisions. And if a tenant tries to sue you or becomes angry when they are rejected, you have your fair application process clearly documented.
Online rental applications can be a great option because you or the tenant are less likely to lose them. They are also easy to adjust if you decide to change how you run your rental.
Check a credit report
When tenants have a positive credit history, they’re often more likely to pay their rent on time each month. You can find effective tenant credit check services online. Look into their payment history and whether they had previous issues with late payments. You can also look at their outstanding debt and compare it to their income. All of this information can give you insight into their financial situation.
It is best to tell your applicants that you will be running this check, so they understand all the factors you are looking into. If you need to pay for these services, consider charging the applicant a credit fee in the application.
Run a background check
Before you look into a tenant’s criminal history, be sure that it is legal to do so in your state. If it is legal, you have several ways to obtain this information. First, you can consider running an online background check through a tenant screening service. You may also search for the tenant’s name in your local court records.
While smaller crimes may not be of any concern, certain crimes should raise red flags. This includes anything involving past evictions, violent crimes, sexual crimes, and theft. You want to make sure that a tenant doesn’t put you or their neighbors in danger.
Ask for references
Your tenant application may also ask for contact information of past landlords. When you call the landlords, ask whether the applicant owes any money or if they caused any damage to the property. You can ask whether they caused any disruptions and if they paid their rent on time each month.
If the landlord would rent to the tenant again, that’s a sign that they are a viable applicant for your own rental properties. You might also consider calling the applicant’s employer. This will verify that they have some sort of steady income and that the employment information they provided is legitimate.
One of the most important steps you can take as a landlord is reviewing federal fair housing laws, as well as any relevant laws in your state. This ensures that none of your screening criteria are discriminatory or non-compliant in any way. Once you do your research and create a thorough tenant-screening system, you can efficiently fill your rental properties with responsible individuals.